Burkholder v. Stump

¶1said: The defendant, if so cited in a court of the state, could, in bar of the proceeding, show that the whole estate had been compulsorily taken away from him by the decree of this court, under whose jurisdiction he was accountable, and had accounted, &c. If this court’s decree recognized a continuing accountability elsewhere, the consequence might be to delay the proceedings in bankruptcy. Unless there were, as may possibly have occurred in some peculiar cases, extraordinary occasion for permitting distribution under the laws of the state, it ought not to be sanctioned. It can only be permitted where it might promote the interests of the general body of the creditors. This might be the case in consequence of something intervening between the voluntary assignment and the commencement of the proceedings in bankruptcy, such as an intervening judgment or execution, though it might, perhaps, even then, be preferable in most cases, to protect the general equities by injunction, and work them out in bankruptcy, or under the auxiliary equitable jurisdiction. Every person receiving one of these assignments ought to know that the assignment is liable to be set aside if a bankruptcy follows; and the allowance to him of his charges and expenses ought to be refused where it cannot be so guarded as to prevent any injurious duplication of charges. In some of the judicial districts of the United States, the allowance is refused wholly; and occasional precedents of contrary directions here, will not be followed, if to follow them would result in any injustice to creditors.